What is it called when several nations eliminate trade restrictions among themselves and apply uniform tariffs on imports from non-member countries?

Multiple choice question for The International Economy And Globalization. Select an option, then review the explanation below.

Explanation

A customs union occurs when member countries remove internal trade barriers and adopt a common external tariff on imports from outside nations. This differs from a free trade area, where only internal barriers are removed without a shared external tariff.

Practice related questions from the same subject.

1.In which type of goods do Less Developed Countries (LDCs) typically hold a comparative advantage?
2.Why did output decline drastically in the economies undergoing transition?
3.When products are sold abroad at prices below the marginal cost of production and the marginal benefit to local consumers, which policy is most likely supporting this situation?
4.How do tariffs affect the production levels of domestic companies and the consumption habits of consumers?
5.The equilibrium exchange rate adjusts to neutralize disparities in which of the following international economic factors?

What is it called when several nations eliminate trade restrictions among themselves and apply uniform tariffs on imports from non-member countries?

Explanation

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